Although the Dow fell 254 points on Tuesday, you can see that the selling inflicted precious little damage on the E-Mini S&Ps. They would need to fall to the green line to trigger a ‘counterintuitive’ short, and that is what I expect to happen. I usually wait for Hidden Pivot levels to get hit before I hazard such predictions, but I am so cautious most of the time that I hope you’ll pardon me just this once for going out on a limb, even if I’m wrong. Actually, I am prepared to turn hell-of-bullish if the futures surprise by rallying above the ‘external’ peak at 2763.00 (see inset), especially within the next two or three days. Since getting short with a sell-top at 2695.66 would imply entry risk of nearly $3000 per contract, I would suggest doing so only with a ‘camouflage’ set-up. Stay close to the chat room for guidance on this in real time, assuming the signal hasn’t been triggered in the dead of night. Once decisively below the green line, the March contract would become an odds-on bet to reach 2637.16, a midpoint Hidden Pivot support associated with a target at 2520.16. If that last target is achieved, the Dow, currently trading for around 24,964, would be nearer 23,000. There’s a bigger, bearish pattern that could conceivably be in play if the futures close beneath 2579.41 for two consecutive days. Its target is 2404.66, which would equate to a drop in the Dow of around 3000 points. _______ UPDATE (Feb 21, 6:04 p.m.): Today’s FOMC-induced selloff tripped a ‘counterintuitive’ short at the green line (2695.66) with immediate downside potential to at least 2637.16, the Hidden Pivot midpoint. Seasoned Pivoteers will notice, however, that the futures ended the day in a good position to set up a ‘counterintuitive’ buy for a possible move in the opposite direction. Paper-trade this one unless you really know what you’re doing. Assuming C remains at 2692.25, the entry signal would occur on a 2724.25 print. You should consider the trade if C is no lower than 2687.00 (i.e., slightly below ‘a’). Plan to exit at least half the position if the implied rally hits the still-to-be-determined p. [Late note: The futures have traded down to 2682.00 tonight, negating a ‘CI’ buy set-up.] _______ UPDATE (Feb 22, 10:49 p.m.): Today’s ups and downs tripped a counterintuitive short and a counterintuitive long of smaller degree. The latter came off a point ‘A’ low that was beneath my optimal range for setting up a trade, but it qualifies as a CI trigger nonetheless. I’ll be most interested to see who wins this one, bulls or bears, since the stakes are so very high. I think we’ll know the answer by week’s end. Here’s the chart.
